Opinion
Decided December 2, 1935.
Trade-marks — Assignment without business and good will void — Amendment to assignment including good will, ineffective, when.
1. The assignment of a trade-mark without a transfer to the assignee of the business and good will of the assignor is void, and the assignee is not entitled to injunctive relief for alleged infringement of such trade-mark.
2. In such case an amendment to the assignment including the good will is ineffective where it is not acknowledged by the assignor.
APPEAL: Court of Appeals for Summit county.
Messrs. Gottwald Breiding, for plaintiffs.
Messrs. Slabaugh, Seiberling, Huber Guinther, and Mr. A.E. Bernsteen, for defendants.
This action was originally brought by the plaintiffs, United Razor Blade Corporation and Katherine Schwarz, against defendants, The Akron Drug Sundries Company, et al., in the Common Pleas Court of Summit county, Ohio, to recover damages for, and to obtain an injunction against, the infringement of a registered trade-mark known as "United Blades," and unfair competition in connection with the manufacture and sale of safety razor blades in labeled envelopes and packages bearing such trade-marks.
A temporary injunction was granted to plaintiffs by the Common Pleas Court, without hearing, and, thereafter, on motion of the defendants and hearing had thereon, the temporary injunction was dissolved by that court, and the court dismissed the defendants L.E. Shunk Latex Products, Inc., and L.E. Shunk from the case.
From the order of the Common Pleas Court dissolving the injunction, and dismissing the last-named defendants, error and appeal were prosecuted to this court, which cases, on motion of the plaintiffs, have been dismissed.
On October 22, 1935, the case was again argued and finally submitted to the Common Pleas Court on the sole question of the right of the plaintiffs to injunctive or equitable relief. The Common Pleas Court determined that the plaintiffs were not entitled to the injunctive or equitable relief prayed for in their petition, and thereupon, after a motion for a new trial was filed by the plaintiffs and overruled, the Common Pleas Court denied such relief and ordered plaintiffs' petition dismissed; reserving for future consideration the relief sought on the cross-petition of the defendant, The Akron Drug Sundries Company.
Error proceedings were then instituted in this court by the plaintiffs under case numbered 2691. Thereafter an appeal was taken by plaintiffs to this court, under case No. 2692. The cause is now heard in this court upon appeal, no motion having been made by the defendants to dismiss the appeal proceeding. The cause is submitted to this court upon the record of the evidence introduced in the Common Pleas Court.
The allegations of plaintiffs' petition are as follows:
"Plaintiff United Razor Blade Corporation alleges that it is a corporation duly organized and existing under and by virtue of the laws of the State of Illinois; that it is engaged in the business of vending and selling an article known as razor blades, to be used with safety razors, which it has for some time last past offered for sale and sold in a rectangular cardboard box, colored dark blue, said box being 1 7/8" in length, 1 1/6" in width, and 5/16" in depth. * * *
"That said device was registered in the United States Patent Office under the Act of February 20, 1905, on the 27th day of May, 1930, as trade-mark No. 271238.
"Plaintiff Katherine Schwarz says that said trademark is her sole property and that she has licensed and authorized plaintiff United Razor Blade Corporation to use said trade-mark in connection with its business of selling razor blades; that by virtue of said license and authorization, the exclusive right to use said trade-mark is now vested in both plaintiffs; that said trade-mark has been used by plaintiffs and Louis Schwarz, the original owner of said trade-mark, for a long period prior hereto; that by reason thereof, razor blades bearing said insignia, and sold by the plaintiffs, have become widely and favorably known as a reliable, valuable and useful article, and have acquired a high reputation as such, and have commanded and still command an extensive sale at Akron, Ohio, and elsewhere, which is and has been a source of great profit to the plaintiffs.
"That such article is known to the public and to the buyers and consumers thereof by the said name of `United Blades' and it is generally recognized by the plaintiffs' own proper device and trade-mark as aforesaid.
"That notwithstanding the quiet use and enjoyment by the plaintiffs of the said name and trade-mark, the defendants, well knowing the premises, but wilfully disregarding the plaintiffs' rights, thereafter, and in the year 1935, wrongfully prepared and offered for sale and now does offer for sale and sell, at Akron, Ohio, and elsewhere, an article in imitation of the plaintiffs' article, with the intent and purpose to deceive the public and the buyers and consumers thereof, which article is called by said defendants `United Blades,' and has caused it to be put up in packages identical with that of the plaintiffs in all respects, including size and printed material, said packages being labeled with a precisely similar label to that of the plaintiffs, * * *.
"That such imitation of the package and label of plaintiffs' said article, and such use of the words `United Blades' are, and each is, calculated to, and is intended by the defendants to, deceive the purchasers and consumers of plaintiffs' said article, and actually has misled, and still does mislead, many of them to buy the article sold by the plaintiffs, greatly to the diminution of the business and profits of these plaintiffs.
"That the article so put up and sold by the defendants in imitation of the plaintiffs' article is of a greatly inferior quality in that the blade sold by the said defendants is made of an inferior quality steel and is of a different design and pattern, and has neither the shaving quality nor the serviceability of the plaintiffs' product, and that by reason of the premises the general esteem and reputation of the said articles sold by the plaintiffs has been injured greatly to the diminution of the said business and profits of the plaintiffs.
"Plaintiffs further say that they have made demand on defendants to cease and desist from further infringement of their rights and to discontinue the perpetration of said fraud upon the public, but defendants have neglected, failed and refused to comply therewith.
"That by reason of the premises, plaintiffs have been injured to their damage in the sum of One Hundred Thousand Dollars ($100,000.00).
"Wherefore, the plaintiffs pray for a judgment and/or order against the defendants, as follows:
"First: For One Hundred Thousand Dollars ($100,000.00) damages;
"Second: That the defendants, their officers and agents, be temporarily and forever restrained from preparing, putting up, selling, or offering for sale, said imitation of the plaintiffs' article, or any article bearing the name of `United Blades,' or any imitation of the label or trade-mark of the plaintiffs, and from using upon their packages of razor blades the words `United Blades' either combined or not combined with the trade-mark of the plaintiffs;
"Third: That the defendants account for and pay over to the plaintiffs all profits realized by them upon the sale of said articles by them with any imitation of plaintiffs' said trade-mark;
"Fourth: For such other and further relief as may be just and proper, together with the costs of this action."
To this petition of plaintiffs, The Akron Drug Sundries Company filed its separate answer and cross-petition, as follows:
"For its separate answer to the petition of the plaintiffs, the defendant The Akron Drug and Sundries Company admits that United Razor Blade Corporation is a corporation duly organized and existing under and by virtue of the laws of the State of Illinois, alleging, however, that it was so organized only on the 8th day of June, 1935.
"It admits that boxes containing safety razor blades have been labeled with a device, of which the one pasted upon page one of the plaintiffs' petition is a specimen, alleging, however, that said label was so used by others than the plaintiffs.
"It denies each and every other allegation contained in the plaintiffs' petition and prays that said petition may be dismissed at the costs of the plaintiffs.
"Cross-Petition.
"For its cross-petition against the plaintiffs, United Razor Blade Corporation and Katherine Schwarz, the defendant The Akron Drug and Sundries Company alleges that it is a corporation duly organized and existing under the laws of the State of Ohio; that it has registered with the United States Patent Office a trademark bearing the words `United Blades,' so combined as to form in design a shield; that said trade-mark was registered on the 20th day of June, 1935, and has been examined and passed for publication by said United States Patent Office; that no other person is the owner of or has the right to use the words `United Blades' in a design like unto a shield, or similar to that registered by this cross-petitioner; that the plaintiff Katherine Schwarz wrongly and without right claims to be the owner of a trade-mark similar in design to that registered by this cross-petitioner, and has wrongly and without right pretended to give a license to use said trademark to the plaintiff United Razor Blade Corporation; that neither of said plaintiffs is rightly the owner thereof, nor has any right or interest therein, and that neither of the said plaintiffs has any right or interest, nor can have any right or interest, in a certain trade-mark registered May 27, 1930, as trade-mark No. 271238, but both said plaintiffs pretend to have rights or interests in said trade-mark and have attempted to and continue to attempt to market razor blades with that trade-mark and design thereon; that thereby this cross-petitioner will be prejudiced and damaged in its efforts to manufacture and sell razor blades containing the design and name `United Blades' thereon; that the purpose and intent of said plaintiffs in wrongly using said mark and design is to interfere with, harass and annoy the defendant and cross-petitioner in the rightful use of the design owned by it, and to cause injury and damage to the business done by the defendant and cross-petitioner.
"Wherefore, the defendant and cross-petitioner prays that the plaintiffs may be perpetually restrained and enjoined from preparing, putting up, selling or offering for sale, any article bearing the name `United Blades,' or any imitation of the label or trade-mark registered by this defendant and cross-petitioner with the United States Patent Office on June 20, 1935; or from using, upon packages of razor blades manufactured or sold by them, the words `United Blades,' either combined or not combined with the trade-mark registered by this defendant and cross-petitioner.
"It further prays that the plaintiffs may be required to account for and pay over to this defendant and cross-petitioner all profits realized by them upon the sale of razor blades with any words or marks thereon similar to or containing the design registered by the defendant and cross-petitioner on the 20th day of June, 1935."
The defendant Maurice Gussman filed his separate answer to the petition of plaintiffs by adopting all of the answer of the defendant, The Akron Drug Sundries Company.
The defendant L.E. Shunk and the defendant L.E. Shunk Latex Products, Inc., each filed a separate answer denying all the allegations of plaintiffs' petition and specifically alleging that said defendant has at no time sold, manufactured or otherwise dealt in razor blades, of any kind or character, bearing any trademark or tradename, and alleging that said defendant has no relationship to, or ownership of, the codefendant The Akron Drug Sundries Company.
As hereinbefore stated, the only matter heard and determined in the Common Pleas Court was the matter of the right of the plaintiffs to injunctive or equitable relief, as prayed for in the petition, there never having been any hearing in the Common Pleas Court upon the cross-petition of the defendant The Akron Drug Sundries Company, and we are, therefore, on this appeal, concerned with the sole question of the right of the plaintiffs to the injunctive and equitable relief prayed for in the petition.
From the pleadings and evidence, we find the following facts:
1. The trade-mark in question, "United Blades," the words combined so as to form a shield, was originally registered in the United States Patent Office by, and in the name of, Louis Schwarz, on the 27th day of May, 1930, as trade-mark No. 271238, under the Act of February 20, 1905. The form of said trade-mark was designed by a member of the family of Louis Schwarz.
2. For at least two years prior to the registration of the trade-mark, and for about one year thereafter, Louis Schwarz, under the name "United Blade Company," was engaged in the business of selling razor blades, employing the name "United" on such blade and the device as registered by him. In 1931, United Razor Blade Corporation was incorporated under the laws of the state of Illinois, and, on the 23rd day of April, 1931, Louis Schwarz in writing, which was duly recorded in the United States Patent Office on the 29th day of April, 1931, duly assigned said trade-mark together with "the good will of the United Blade Company, the business in which said trade-mark is used" to the United Razor Blade Corporation, known in the record as "old company."
3. Plaintiff Katherine Schwarz was one of the incorporators, and afterward became president, of United Razor Blade Corporation (old company), and owned a majority of its stock. United Razor Blade Corporation (old company), after the assignment to it by Louis Schwarz of the trade-mark and the good will of United Blade Company, actively engaged in the razor blade business, using the trade-mark until the company was dissolved on June 27, 1934, for failure to pay its franchise tax to the state of Illinois for the year 1933. Prior to the order of dissolution of United Razor Blade Corporation (old company), to wit, on or about April 24, 1933, United Razor Blade Corporation (old company) assigned the trade-mark to the plaintiff Katherine Schwarz, but no effort was made to place this assignment upon the record in the United States Patent Office until after this action was begun in the Common Pleas Court of Summit county, Ohio. Reference will be made to the terms of this written assignment hereinafter, but from the whole record we find that United Razor Blade Corporation (old company) did not at the time of this transfer part with its business and good will, but continued to use the trademark in its business of selling razor blades until the date of the dissolution of the corporation.
4. Katherine Schwarz, after the assignment to her of the trade-mark, did not individually engage in the business of manufacturing or selling razor blades, but after the old company, United Razor Blade Corporation, had been dissolved, a new corporation was formed by Katherine Schwarz, her two daughters, and a Mr. Perel, under the laws of the State of Illinois, under the name of Louis Schwarz Corporation, although Louis Schwarz owned no stock in said corporation, Katherine Schwarz being the principal stockholder thereof. Louis Schwarz Corporation engaged in the wholesale drug business, and in connection therewith it sold razor blades which it caused to be manufactured for it and sold under the same trade-mark which had originally been registered by said Louis Schwarz. Louis Schwarz Corporation became financially embarrassed, among its creditors being The Akron Drug Sundries Company in amount of more than $20,000, and Louis Schwarz Corporation, on or about the 15th day of May, 1935, made an assignment for the benefit of its creditors to one H.W. Cline, trustee, and said H.W. Cline, as assignee for the benefit of the creditors of the Louis Schwarz Corporation, on the 22nd day of May, 1935, sold and delivered to The Akron Drug Sundries Company of Akron, Ohio, the following goods and chattels and property, to wit:
"All and singular that certain stock of merchandise, inventory, tools, fixtures, and one 1934 Chevrolet Truck, now located at 508 S. Dearborn St., Chicago, Illinois, in the premises formerly occupied by Louis Schwarz Corporation, together with good will and the right to use the name `successors to Louis Schwarz Corporation.'"
As shown by the inventory made by said H.W. Cline, as assignee for the benefit of the creditors of Louis Schwarz Corporation, copy of which is admitted in evidence, a considerable quantity of drugs of various kinds, and other merchandise such as is usually kept for sale by a drug company, as well as about two hundred cartons of razor blades labeled with the mark "United Blades," the words forming a shield, came into the possession of The Akron Drug Sundries Company, and, thereafter, The Akron Drug Sundries Company engaged in the business of selling razor blades in packages and cartons stamped in all respects with said trade-mark formerly registered by Louis Schwarz in the United States Patent Office.
After the assignment by Louis Schwarz Corporation for the benefit of its creditors, the defendant Maurice Gussman, who is a stockholder and the secretary of The Akron Drug Sundries Company, went to Chicago and negotiated with the plaintiff, Katherine Schwarz, her husband and daughters, for the purpose of making some arrangement whereby the trade-mark might be used by a new corporation to be formed by Mrs. Schwarz and Gussman, whereby a certain part of the profits arising from the sale of razor blades would be applied toward the payment of the obligation owing by Louis Schwarz Corporation to The Akron Drug Sundries Company. These negotiations failed because Katherine Schwarz refused to associate herself with Gussman under any arrangement of the nature outlined.
Thereafter, on the 8th day of June, 1935, Katherine Schwarz and her daughters organized a new corporation of the same name as the first corporation herein referred to, to wit, United Razor Blade Corporation, known in the record as "new company," and, after the organization of this new company, it engaged in the business of selling razor blades, using the same trademark hereinbefore referred to. After the negotiations made by Maurice Gussman in his effort to form an association with Mrs. Schwarz, for the manufacture and sale of razor blades, had fallen through, to wit, on June 20, 1935, The Akron Drug Sundries Company filed its application in the United States Patent Office for the registration, in its name, of the same trade-mark which had originally been registered in the name of said Louis Schwarz.
The Akron Drug Sundries Company is a corporation, organized under the laws of the state of Ohio on May 22, 1933. In its application filed in the United States Patent Office for the registration of the trademark it set forth that this "trade-mark has been continuously used and applied to said goods in applicant's business since October 1, 1928." The title report made by the chief of the assignment division in the United States Patent Office shows that on July 22, 1935, "the title appears from the assignment records to be vested in United Razor Blade Corporation, Chicago, Ill., corp. of Illinois."
The Akron Drug Sundries Company furnished the patent office with a letter from the Secretary of State of the state of Illinois, setting forth that United Razor Blade Corporation was dissolved by action of the Attorney General's office in the Superior Court of Cook county, June 27, 1934, for failure to pay annual franchise tax for the year 1933.
Thereafter, the application of The Akron Drug Sundries Company for a registration of said trade-mark was passed for publication, and notice thereof was published, pursuant to the provisions of the Act of February 20, 1905, relative to trade-marks (Title 15, Section 81 et seq., U.S. Code). Thereupon the plaintiff Katherine Schwarz filed her objection to the registration of such trade-mark in the name of The Akron Drug Sundries Company, and registration was refused pending such time as the right of registration may be determined in accordance with the provisions of the Act of February 20, 1905.
The petition of plaintiffs herein was filed in the Common Pleas Court of Summit county on the seventh day of August, 1935, and thereafter, on or about the 10th day of August, 1935, the assignment made by United Razor Blade Corporation (old company) to Katherine Schwarz, under date of April 24, 1933, was presented to the United States Patent Office for record. At the time the same was presented for record it was found that the assignment was not in the form prescribed by the statute in that it purported to be an assignment of the trade-mark only, without an assignment of the business and good will of United Razor Blade Corporation. Thereupon the attorney for Katherine Schwarz, without any further action upon the part of the corporation, changed the original assignment by adding in ink thereon the words "together with the good will of the business in which the mark is used," and after such amendment the assignment was recorded in the United States Patent Office.
Counsel for plaintiffs urge that since the United States Patent Office recorded the assignment from United Razor Blade Corporation to her, this record title in her name constitutes prima facie evidence of her ownership of this trade-mark.
It may be conceded that the record does constitute prima facie evidence of the ownership of the trade-mark by Katherine Schwarz, but the record in this case very clearly, we think, overrides this prima facie showing of title, and, from the evidence introduced in this case, it is quite clear to this court that, at the time United Razor Blade Corporation executed its assignment of the trade-mark in question to Katherine Schwarz, the corporation did not sell and convey to Katherine Schwarz its business and good will, and we find and hold that such assignment in gross, and separate from the business and good will of United Razor Blade Corporation, was null and void. The record discloses that this assignment from United Razor Blade Corporation to Katherine Schwarz was executed in duplicate, and one of these duplicate copies is admitted in evidence, showing that the trade-mark alone was the subject of the assignment, without the business and good will; and the record further discloses the fact that United Razor Blade Corporation did not acknowledge this assignment to Katherine Schwarz after the same had been amended by the attorney in Washington so as to incorporate therein the words "together with the good will of the business in which the mark is used." Such acknowledgment is required by the pertinent provisions of the Act of February 20, 1905.
In support of such finding by this court we refer to the pertinent provisions of the Act of February 20, 1905 (Title 15, Section 90, U.S. Code), as follows:
"Every registered trade-mark, and every mark for the registration of which application has been made, together with the application for registration of the same, shall be assignable in connection with the good will of the business in which the mark is used. Such assignment must be by an instrument in writing and duly acknowledged according to the laws of the country or State in which the same is executed; any such assignment shall be void as against any subsequent purchaser for a valuable consideration, without notice, unless it is recorded in the Patent Office within three months from date thereof. The commissioner shall keep a record of such assignments." (Italics ours.)
Under this section a trade-mark registered under the act cannot be assigned unless the good will is also transferred, and an assignment of the trade-mark confers no rights on the assignee if the assignor continues to sell the same article, although under a different name. Eiseman v. Schiffer (C.C., N.Y.), 157 F., 473.
"A trade-mark or name cannot be assigned, except in connection with the transfer of the particular business in which it has been used, with its good will, and for continued use upon the same articles or class of articles." Carroll v. Duluth Superior Milling Co. (Minn., 1916), 232 F., 675, 146 C.C.A., 601.
There is no such thing as conveyance of trade-mark in gross, but it must as matter of law be appurtenant to a business. Bulte v. Igleheart Bros. (Ind., 1905), 137 F., 492, 70 C.C.A., 76; Independent Baking Powder Co. v. Boorman (C.C., N.J., 1910), 175 F., 448; President Suspender Co. v. MacWilliam (D.C., N Y 1916), 233 F., 433, affirmed (C.C.A., 1916), 238 F., 159, certiorari denied, MacWilliam v. President Suspender Co. (1917), 243 U.S. 636, 61 L. Ed., 941, 37 S. Ct., 399; Baldwin Co. v. R.S. Howard Co. (D.C., N.Y., 1916), 233 F., 439, affirmed (C.C.A., 1916), 238 F., 154; Allen v. Walker Gibson (D.C., N.Y., 1916), 235 F., 230; Coca-Cola Bottling Co. v. Coca-Cola Co. (D.C., Del., 1920), 269 F., 796; In re Leslie-Judge Co. (C.C.A., N.Y., 1921), 272 F., 886, certiorari denied; Green v. Felder (1921), 256 U.S. 704, 65 L. Ed., 1180, 41 S. Ct., 625; Col. W.F. Cody Historical Picture Co. v. Colonial Amusement Co. (D.C., Colo., 1922), 284 F., 873; Morand Bros., Inc., v. Chippewa Springs Corp. (C.C.A., Ill., 1924), 2 F.2d 237, certiorari denied, Chippewa Springs Corp. v. Morand Bros., Inc. (1925), 267 U.S. 592, 69 L. Ed., 803, 45 S. Ct., 229; The Fair v. Jose Morales Co. (1899), 82 Ill. App. 499; Smith v. Yost (1919), 72 Ind. App. 628, 125 N.E. 73; Crossman v. Griggs (1904), 186 Mass. 275, 71 N.E. 560; Wiltberger v. Walker (1883), 8 Dec. Rep., 588, 9 W.L.B., 42; Holley Milling Co. v. Salt Lake Jordan Mill Elevator Co. (1921), 58 Utah 149, 197 P. 731.
"A trademark being a mere device to secure to one the benefits of the good will attaching to his business, it cannot exist apart from such good will. Accordingly, when the business and good will become extinct, the trademark dies also. * * * It follows that trademarks cannot be assigned except for use in the same way and for the same purpose as that for which the trademark was originally adopted. * * * Hence it is held that a trademark cannot be assigned except in connection with the particular business in which it has been used, and for continued use upon the same article or class of articles which it was first applied to and used upon by its original adopter. * * * [A] trademark cannot be sold as an absolute right disassociated from any particular business or goods." (Italics ours.) 28 American English Encyclopedia of Law (2nd ed.), 399, 400, 404.
From the evidence in this case it is noted that after the assignment of the trade-mark by United Razor Blade Corporation to Katherine Schwarz, the United Razor Blade Corporation continued to engage in the business of selling razor blades by the use of the same trade-mark until the date of the dissolution of such corporation.
"2. An assignment of a trademark, * * * unaccompanied by the business or good will in which the trademark had been used, is ineffectual for any purpose except as evidence of an abandonment of the mark by the assignor, and confers upon the assignee no exclusive right to its use." Sauers Milling Co. v. Kehlor Flour Mills Co. (1913), 39 App. D.C., 535.
"3. Transfer of trade-mark without transfer of good will and business in connection with which mark has been established is void." Lindner Co. v. Myrod Shoe Co., 38 Ohio App. 182, 175 N.E. 879.
But it is claimed on behalf of the plaintiffs in this case that after the assignment by United Razor Blade Corporation (old company) to Katherine Schwarz of the trade-mark in question, the use of this mark by the assignor thereafter until the dissolution of the corporation was by the permission of Katherine Schwarz, and it is further claimed that the use of this trade-mark by Louis Schwarz Corporation was with the permission of Katherine Schwarz and in the nature of a license which could be terminated by her at any time, and that she had the right to take back to herself exclusively the use of the trade-mark after Louis Schwarz Corporation made its assignment for the benefit of its creditors. We have been cited to no case holding that a license of a trade-mark is valid in the absence of a transfer of the business and good will of the licensor. As authority for the proposition contended for by counsel for plaintiffs to the effect that a person who acquires a trade-mark may license the use of such mark, and on the termination of the license will again acquire the right to assume its use, we are cited to the case of Lawrence-Williams Co. v. Societe Enfants Gombault et cie (C.C.A. 6th), 22 F.2d 512.
An examination of this case does not bear out the claim made by counsel for plaintiffs, and it is specifically stated in the opinion:
"Before entering into the first contract, the plaintiff had been selling its liniment in this country under the name `Gombault's Caustic Balsam.' The defendant contends * * * that the product had not at that time become identified with the name upon the markets of the country. * * * We think the status of plaintiff's business when the first contract was made was such as entitled it to the exclusive use of the name in the selling of a caustic balsam liniment. * * *
"Nor was there an assignment or abandonment of the name * * *. Contrarily there was, we think, a definite understanding between the plaintiff and the defendant that the name should belong to the plaintiff."
In the case under consideration by this court we have no evidence of any contract or agreement between Katherine Schwarz and United Razor Blade Corporation (old company) whereby such corporation was authorized to use this trade name from the date of the assignment to the date of its dissolution, nor is there any evidence of an agreement or contract between Katherine Schwarz and Louis Schwarz Corporation whereby Katherine Schwarz granted to that corporation the right to use this trade-mark.
It has been clearly held in Checker Cab Mfg. Corp. v. Green Cab Co. (C.C.A. 6th), 35 F.2d 631 (affirming 27 O.L.R., 235):
"Such retention of rights in operation and continued control of a trade-mark could be preserved, if at all, only by express provision in the original contract, which provision the parties here have seen fit to omit."
But let us assume that the transfer of this trade-mark from United Razor Blade Corporation (old company) to Katherine Schwarz operated as a valid transfer thereof, disconnected with any business or the good will of any business. It seems clear to us that when Katherine Schwarz and her daughters incorporated the firm of Louis Schwarz Corporation, and authorized Louis Schwarz Corporation to use this trade-mark in its business, in the absence of any express provision in the contract whereby the trade name was to revert to Katherine Schwarz at any particular time, then and in such situation Louis Schwarz Corporation became the owner of this trade-mark with the right to use the same in connection with its razor blade business, and when Louis Schwarz Corporation made an assignment of its business and stock of goods to the assignee for the benefit of its creditors, and that assignee sold and conveyed all of this stock of goods and merchandise, together with the business and good will of Louis Schwarz Corporation, with the right to use the name, "successors to Louis Schwarz Corporation," this trade-mark thereby passed to The Akron Drug Sundries Company.
"1. A trademark cannot be assigned or its use licensed, except as incidental to the transfer of the business or property in connection with which it has been used." Mayer Fertilizer Junk Co. v. Virginia-Carolina Chemical Co. (1910), 35 App. Dec., 425.
There is no evidence in the record that Katherine Schwarz, as an individual, ever used the trade name "United Blades," either in the business of manufacturing or selling razor blades. She testifies that she was the majority stockholder in the Louis Schwarz Corporation, and one of its officers. From the record it seems clear to this court that Louis Schwarz Corporation was organized by her and her associates for the particular purpose of using this trade-mark in connection with its business of selling drugs and razor blades.
Ethel Schwarz, a witness for plaintiffs, testifies that Louis Schwarz Corporation was selling these blades exclusively and no one else was selling them. Louis Schwarz Corporation had trucks which it used in its business, upon which trucks the same trade-mark was exhibited in connection with a razor blade. Ethel Schwarz further testified that the agreement between her mother and the Louis Schwarz Corporation, permitting that corporation to make use of the trade-mark and sell these blades, was not in writing, but was by "word of mouth." While this witness testifies that her mother licensed the Louis Schwarz Corporation to use the trade-mark, neither she nor any other witness testifies that Katherine Schwarz had any business which was transferred with the license, or that the right to use the trade-mark was to revert to Katherine Schwarz at any time.
In making our finding in this case we have noted in the reply filed by plaintiffs to the answer of The Akron Drug Sundries Company the following averment:
"Further replying to said answer plaintiffs admit that said label was used by others than the plaintiffs, but that the use of said label by others than the plaintiffs was with the knowledge and consent of the plaintiff Katherine Schwarz."
It seems apparent that the value of a trade-mark consists in the right to the exclusive use thereof in connection with the business of the owner thereof, and in the absence of averment and proof by Katherine Schwarz that the use of this trade-mark by others than the plaintiffs was granted to such others in connection with some business of the owner of the trade-mark, is in itself sufficient to defeat plaintiffs' right to injunctive relief in this case, especially in view of the fact that no showing is made in the record that the right to the trade-mark was to revert to said Katherine Schwarz at the termination of the period for which the license was granted.
The record discloses that The Akron Drug Sundries Company, after its purchase of the stock of goods and good will of Louis Schwarz Corporation, proceeded to place orders with the same manufacturer of razor blades that had formerly manufactured the same for the various corporations which had used this trade-mark. There is no evidence in the record that the blades manufactured or sold by The Akron Drug Sundries Company were of inferior quality to those formerly sold under this trade-mark.
Our conclusion, from a consideration of the evidence in this case, is that no showing of unfair competition on the part of defendants has been made; and as there has been no hearing on the cross-petition of The Akron Drug Sundries Company we make no comment with reference to the claim that plaintiffs have been guilty of unfair competition in connection with the trade-mark in question.
It would be inequitable and unfair to permit plaintiffs to prevail in this lawsuit by the issuing of an injunction against the defendant, The Akron Drug Sundries Company, which purchased the business and assets, including the good will, of Louis Schwarz Corporation. The record does not disclose any evidence warranting the granting of relief to plaintiffs, or either of them, as against any of the defendants.
The injunctive and equitable relief prayed for by the plaintiffs is denied, and their petition is dismissed at their costs.
Petition dismissed.
FUNK, P.J., and WASHBURN, J., concur.